IIABCal Criticizes Proposed Health Exchange Regulations

Proposed regulations for the establishment of Health Benefit Exchanges—required under the federal health reform law—do not adequately recognize the essential role played by broker-agents in the marketplace, and do not sufficiently protect consumers from untrained and unlicensed persons selling policies in the Exchange, IBA West has told the California Health Benefit Exchange Board in testimony submitted this week.

Five separate state agencies have drafted a unified position statement on the proposed regulations, being promulgated by the US Department of Health and Human Services, and that position statement should be amended to address the extent to which the proposed regulations are producer-deficient, IBA West General Counsel Steve Young said in his written testimony.

The proposed HHS regulations are required by the Patient Protections and Affordable Care Act—better, if derisively, known as “Obamacare”—which (among other things) requires most legal residents to have health insurance, requires states to create a health Benefit Exchange through which individuals and small businesses can purchase health insurance policies from the private voluntary market, and provides premium credits for low-income individuals. California is among a small number of states that has moved aggressively and quickly to get an exchange established.

In a rare show of virtual unanimity, five state administrative agencies agreed upon a single statement to be submitted on their joint behalf to HHS; the agencies are the Department of Insurance, the Department of Managed Health Care, the Managed Risk Medical Insurance Board, the Health and Human Services Agency, and the California Health Benefit Exchange.

However, the groundrules for establishment of the exchange should have provided for all sellers of Exchange products to meet the examination, licensing and regulatory requirements the Department of Insurance imposes upon life agents, Young said.